The paper argues that the reason real world fixed exchange rate regimes usually have finite bands instead of completely fixed exchange rates between realignments is that exchange rate bands, counter to the textbook result, give central banks some monetary independence, even with free...

The European Monetary System (EMS) is intended to stabilise internal exchange rates. The EMS uses a formula to allocate responsibility among the member nations for counteracting exogenous disturbances of exchange rates. This paper describes the results of a simulation study of the EMS....

The paper analyzes the sources of exchange rate movements in emerging economies in the context of monetary tapering by the Federal Reserve. A structural vector autoregression framework with a long-run restriction is used to decompose the movements of nominal ex-change rates into two components:...